Arabica coffee term 03/2023 (KCEH23) fell sharply though trading alone, down 5.05 cents (-2.94 percent), closing price at 166.59 cents/lbs.
Market overview
Closing the session yesterday, the dollar rose slightly amid the Christmas market (Noel) and China said it would cancel the COVID-19 quarantine rule for domestic tourists, an important step. in the reopening of borders has boosted the dollar’s recovery.
The US Personal Consumption Price Index (PCE) for November 2022, published at the end of last week, showed that the index has barely increased, while inflation continues to cool down, reinforcing expectations from market that the Fed is likely to scale back its aggressive monetary tightening. The DXY index ended the session up 0.134% to 104,220.
The Brazilian Real fell at 1 USD = 5.2934 BRL. This exchange rate has stimulated Arabica coffee producers to boost sales, which has put downward pressure on prices.
According to a report by the US Department of Agriculture (USDA), global coffee production is estimated to increase by 6.6 million bags to 172.8 million bags in the 2022/2023 crop year. Additionally, the USDA forecasts that the Brazilian arabica crop is forecast to increase by 3.4 million bags to 39.8 million bags, although much lower than recent crops in the country’s biennial cycle. this year, peaking at nearly 50 million bags. The above information had a negative impact on Arabica prices.
Technical Trends
According to technical analysis, RSI is at the average level, MACD shows bullish momentum signal.
It is expected that in the short term, Arabica price may increase to detect resistance with the near-term target of MA50 174 – 175.on the contrary, 160-162 is the near support zone of the price.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 164.5 – 165 cents
- Support zone 2: 162.5 – 163 cents
- Stop Loss: 159.5 cents
CL SELL DOWN:
- Resistance zone 1: 170 – 170.5 cents
- Resistance zone 2: 173 – 173.5 cents
- Stop Loss: 175.5 cents
